Trends and analysis: WB plays new tune on old notes

There is enough data to convince the incumbents and future governments about the potential and importance of agriculture. However, as with all its policy prescriptions the World Bank’s suggestions must not be followed, if wholesome and equitable development is desired. The state should by no means remain satisfied by merely creating a healthy investment climate or attracting more private investment in the sector. The state must itself remain an active player in the market for many more years so as to be able to intervene in and govern the market to drive in a suitable direction, writes Tanim Ahmed*

ONE of the main moot points of the current negotiations in the World Trade Organisation happens to be agriculture and quite rightly so. Agriculture happens to be a sensitive sector across the world, both commercially and politically. The World Bank’s annual development report this year is titled ‘Agriculture for Development.’ It was launched this week during annual meetings jointly with the International Monetary Fund.

It is surprising that this agency would choose to admit that trade liberalisation hurts the interest of food importers and say subsidies in rich countries hurt farmers in poor countries, particularly highlighting the case of cotton subsidies of the United States and mentioning the plight of farmers in countries like Burkina Faso and Benin. But the agency refuses to come away from its professed path towards economic prosperity – market freedom and economic liberalisation.

Although it does acknowledge that farmers in Bangladesh would lose out, the agency sticks to its stance favouring free trade claiming that in the long run it would be beneficial. There have been publications of the same agency that have pointed out beyond any doubt that the net effect of successful completion of the Doha Round would be negative for Bangladesh, and that the worst affected would be marginal farmers and the urban poor. Such contradictions between the agency’s findings and claims are not new or accidental. The World Bank’s internal reports as well as research carried out by others point out that the agency often makes claims, which are not substantiated by its own data. The false is necessary to vindicate a foregone conclusion and advance its neoliberal agenda.

With the renewed interest in the ‘welfare’ of Africa, especially sub-Saharan Africa, particularly after investments from advanced developing countries like China and India have begun to compete with those from the North, it is not surprising that the entire report heavily draws on examples and case studies highlighting the plight of that region of the world. In sync with the political establishment of the North, the World Bank has dutifully devoted much attention to the impoverished masses of Africa.

The importance of agriculture is evidently and convincingly demonstrated. It states that poverty still remains a largely rural problem as 80 per cent of all poor people live in rural areas. Agriculture still affects over half the population of the entire world but, crucially still, agricultural growth, the report points out, is a few times more potent in reducing poverty than the growth of other sectors. Unfortunately, agriculture remains among the most ignored and neglected sectors by successive governments in Bangladesh as well as in many other countries, the bank observes and commendably calls for more attention there.

That agriculture is more potent in poverty reduction than other sectors is evident from the fact that in Bangladesh it employs over half of the labour force and contributes just over a fifth of the GDP. Although the share of agriculture is decreasing, its potential to generate employment, being a labour intensive sector, remains high. Thus renewed attention in agriculture and welfare of the farming community would surely translate into welfare gains for most of the labour force and thereby benefit most of the populace. This applies for other countries as well where agriculture still remains labour intensive and mechanised agriculture is a rather remote reality.

The agency’s suggestions do not ignore the corporate interests in agriculture, and understandably so. Among the several policy briefs is one that suggests harnessing the full potential of genetically modified organisms and transgenic crops, developed by an industry which is worth billions of dollars and has the potential to grow exponentially with worldwide implementation of intellectual property rights. There is considerable opposition to such crops in Bangladesh as well as in Europe and other parts of the world. The report laments the slow adoption of these crops across the world and highlights the case of Bt cotton that was widely adopted in India and China. While pointing out the financial gains, the report conveniently overlooks the fact that wide adoption of Bt cotton, which had been touted as pest resistant, failed after a few years as pests developed biological resistance to it and the crops failed. The offices of Monsanto, the manufacturer, were vandalised in some states of India. Bt cotton has also been said to be one of the factors responsible for self-immolation and suicide of thousands of farmers in India.

The annual report goes as far as admitting that irrigation can increase the incidence of malaria and pesticide poisoning is estimated to cause 355,000 deaths annually. But there is no mention that these deaths have been apparently due to the introduction of the high-yielding varieties of crops – the precursor to hybrid crops and terminator technology – that typically require more inputs than the traditional land races. The high-yielding varieties that were promoted worldwide since the Green Revolution of the 1960s require heavier irrigation and are more dependent on chemical inputs such as fertiliser and pesticides in far heavier doses than traditional crops. Promotion of these varieties along with hybrids and other genetically modified varieties of crops have increased grain yield in exchange for a sharp decline in the overall farm yield.

Since each of the input components, fuel and pumps by way of irrigation, chemical fertilisers, pesticides and herbicides represents substantial commercial interest for corporations based in the North, the World Bank understandably remains silent and instead provides these products with unqualified support despite the worldwide opposition and discontent over genetic modification. This is also in line with the agenda of the lending agencies that essentially strive to ripen markets across the world in favour of corporate interests that also drive the political establishment of the North.

There are no suggestions to adopt wide usage of organic fertiliser and integrated pest management systems that would greatly reduce environmental pollution and soil degradation, although the report does note the prevalence of such phenomena. Although such strategies might reduce the cost of inputs, reduce pollution, improve health and prove economically more rational the lending agency does not toe that line since it would be contrary to the corporate interests that it serves.

As for the state’s involvement in agriculture, the report calls for investment in core public goods such as infrastructure and ensuring good investment climate but clearly discourages the state’s involvement in any sector that has a commercial potential. When outlining suggested approaches to harness the potential of agriculture there is no indication that the state should have mechanisms to intervene in the market and govern the market to suit its needs. In the case of Bangladesh, there is still need for the state to be an active player in the market.

The chronic crisis of urea which often appears to be manufactured and riddled with irregularities wherever private operators are involved naturally suggests that the state should have more control and directly supervise distribution of this vital input since farmers have become unduly dependent on chemical urea despite the wide availability of natural sources of nitrogen. The state-controlled irrigation projects function and assist farmers far better than where irrigation is done on private initiative. The state has typically had little capacity to supply seeds as per demand, especially for paddy. Still, farmers have thus far managed to make do. But without strong regulation and monitoring, imported and hybrid seeds threaten to flood the market and would eventually run out the meagre stocks of traditional varieties that the farmers have still kept alive. It would result in even further soil degradation and higher payment to foreign companies in the form of royalties once the government is compelled to implement intellectual property rights according to its obligations in international agreements in a few years’ time.

The development report suggests migration as another path out of poverty and appears to be advocating that more people move out of agriculture as a source of livelihood. It even goes to say reduced numbers of farmers have greater political leverage than when the numbers are high since they command more resources at their disposal. In fact, one of the suggestions made in the report to reduce poverty is to provide education through which the rural poor will acquire skills needed to acquire a better employment after migration. This, according to the report, should be highly prioritised in order to reap the most benefits from agriculture. The implication that the report favours complete annihilation of marginal farmers and subsistence farming and sustenance of corporate farming is rather disturbing but conforms to the World Bank’s aversion for the poor and direct contribution to worsening disparity.

There is no doubt of agriculture’s potential to reduce poverty. The report states, ‘Cross-country estimates show that GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside agriculture. For China, aggregate growth originating in agriculture is estimated to have been 3.5 times more effective in reducing poverty than growth outside agriculture – and for Latin America 2.7 times more.’

There is enough data to convince the incumbents and future governments about the potential and importance of agriculture. However, as with all its policy prescriptions the World Bank’s suggestions must not be followed, if wholesome and equitable development is desired. The state should by no means remain satisfied by merely creating a healthy investment climate or attracting more private investment in the sector. The state must itself remain an active player in the market for many more years so as to be able to intervene in and govern the market to drive in a suitable direction.

*Contact Tanim Ahmed: tanimahmed@gmail.com

News and Update: IMF wants fresh loan deal with Bangladesh

NewAge, October 23, 2007. Dhaka, Bangladesh

The International Monetary Fund has expressed its willingness to remain actively engaged with Bangladesh in any form that is deemed ‘suitable and appropriate’ by the government. This offer was made by the deputy managing director of the lending agency, Takatoshi Kato, during a meeting with the finance and planning adviser, AB Mirza Azizul Islam, in Washington on Sunday.

An IMF delegation that recently visited Bangladesh returned without making any concrete progress on a fresh loan agreement styled ‘Policy Support Instrument’ following criticism by the economists and rights organisations as well as a lawsuit against such a move. The government’s earlier loan agreement — the so-called ‘Poverty Reduction Growth Facility’ — expired recently.

A news release issued by the Bangladesh embassy in Washington said the finance adviser welcomed IMF’s support for the government’s efforts to address internal and external constraints in conformity with the goals of maintaining macro-economic stability, accelerating economic growth and expediting poverty reduction.

Mirza Aziz, in a separate meeting along with the World Bank’s vice-president for South Asia, Praful C Patel, stressed the need for scaling up the WB’s aid within the framework of the Country Assistance Strategy and giving more assistance in the form of budget support.

The WB’s executive expressed the Washington-based institution’s full support for the reform efforts by the present government and assured it that the WB would strengthen its engagement with the Bangladesh government in the implementation of the reforms agenda.

In the meeting with Mirza Aziz, the IMF executive expressed the hope that the Bangladesh government would ‘seriously keep in view the urgent need to contain the rising inflationary trend through appropriate policies which it finds appropriate’.

The adviser mentioned that the government would address, through appropriate policies, the emerging shocks resulting mainly from escalation of prices of essential products, especially petroleum products, in the international market.

The WB’s prescription of pursuing a contractionary monetary policy for arresting the rising inflation was a bone of contention as the country’s economists termed it suicidal for a growing economy.

Kato, however, appreciated the commitment of the interim government to maintain and sustain macro-economic stability by implementing the needed policies and initiating institutional reforms.

News and Update: Trade liberalisation induces food price hike, WB admits

Khawaza Main Uddin, NewAge, October 22, 2007. Dhaka, Bangladesh

Trade liberalisation that eventually has resulted in skyrocketing of food prices afflicts the rural population of Bangladesh, admits the World Bank in its World Development Report 2008: Agriculture for Development.

The report released by the bank on Friday also says that the trend of shrinking the sizes of farms in economies, such as Bangladesh, which still heavily rely on agriculture, is another major cause of rural poverty, and such a reality can generate further social tensions, leading to civil conflicts.

‘Trade liberalisation that raises the price of food hurts net buyers (the largest group of rural poor in countries like Bolivia and Bangladesh) and benefits net sellers (the largest group of rural poor in Cambodia and Vietnam),’ reads the report.

The report of the multilateral lending agency, which prescribed the process of trade liberalisation in the 1990s, also claims that a liberal trade policy, inducing massive imports of rice by hundreds of small traders during the 1998 floods, helped the government stabilise prices without building up any large stock.

Quoting a Bangladesh study, the WB report asserts that although the ‘average landless poor household loses from an increase in rice prices in the short run’ but it ‘gains in the long run as wages rise over time’.

The report, forecasting a further increase in food prices on the international market, expressed ‘particular concern’ for the food-importing developing countries, ‘Because many of the poorest countries spend a large part of their incomes on cereal imports’.

More than 50 per cent of the poor in Bangladesh, according to the report, comprise the rural landless households and they spend 27 per cent of their total budget for buying rice, the nation’s staple food. And so, it says, ‘Poor Bangladeshis are the most vulnerable to increases in rice prices.’

Only 8 per cent of the country’s poor are found to be net sellers of food. ‘So the aggregate welfare effect of a change in rice prices is dominated by its effect on net buyers.’

Also, the number of farms in Bangladesh has doubled over the past 20 years, increasing the number of farms smaller than 0.2 hectares in size proportionately. ‘Continuing demographic pressures imply rapidly declining farm sizes, becoming so minute that they can compromise survival if off-farm income opportunities are not available,’ the report cautions.

It also points out that ‘a large share of rural households… does not have any access to land’. The Washington-based lending agency, however, attributed what it termed the substantial reductions in rural poverty in Bangladesh to earnings form rising farm and non-farm activities and lower rice prices thanks to use of new technologies, besides manpower export which has also benefited the rural as well as the national economy.

The report has triggered the question whether a densely populated Asian country like Bangladesh, with its labour-intensive small-scale farming, would be able to produce cereals and other staple foods efficiently in its farms that generally tiny in size, especially if rural wages rise.

In South Asia, the report predicts, the decline in farm size will continue because the rural population has been growing by 1.5 per cent a year. As an indicator of poverty, the report mentions that Bangladesh, India, and Nepal occupy three of the top four positions in the global ranking of underweight children.

The World Development Report also expresses concern for the developing countries due to proliferation and stringency of food safety and health measures being adopted in export markets. ‘Many fear that the emerging standards will be discriminatory and protectionist,’ it observes.

The document underlines the need for increasing the productivity of agricultural labour through consolidation and mechanisation of farms to bypass the widening gap between rural and urban wages in many Asian countries.

Millions of workers employed in rural areas are said to be trapped in low-earning jobs in Bangladesh, where around one million people join the rural workforce every year. The WB report mentions that non-farm rural employment increased at the rate of 0.7 per cent and farm employment at 0.1 per cent a year during the 1990s.

Delineating a strong record of agriculture in development, the report posts an estimate that the contribution of agriculture to the growth in gross domestic product was at least twice as effective in reducing poverty as the GDP growth in non-agricultural sectors.

The report calls upon the policymakers of countries facing severe resource constrains to attach a balanced priority to various sectors and give due attention to agriculture, especially to increasing investment in the sector.

The report correlates agricultural development with achievement of the UN Millennium Development Goals of halving extreme poverty and hunger by 2015. It acknowledges that, despite convincing successes, agriculture has not been used to its full potential in many countries because of anti-agriculture policy biases and underinvestment, often compounded by mis-investment and donors’ neglect, at the cost of severe human sufferings.

‘A dynamic “agriculture for development” agenda can benefit the estimated 900 million rural people in the developing world most of whom are engaged in agriculture and who live on less than $1 a day,’ the World Bank Group president, Robert B Zoellick, told the launching ceremony of the report in Washington on Friday.

‘We need to give agriculture more prominence across the board. At the global level, countries must deliver on vital reforms, such as cutting distorting subsidies and opening up markets, while the civil society groups, especially the farmers’ organisations, need more say in setting the agricultural agenda,’ Zoelink maintained.

News and Update: Draft coal policy eyes ban on export

NewAge, October 21, 2007. Dhaka, Bangladesh

The advisory committee formed to finalise the draft coal policy inserted in the draft at a meeting on Saturday some major issues, including ban on coal export and bar on assigning any foreign company with operation of any coal field without participation of any state-run organisation.

The committee, headed by former BUET vice-chancellor Abdul Matin Patwari, also decided in principle to keep a provision in the policy for taking a pilot project on open-pit mining at Petrobangla’s Barapukuria coal field.

The committee, which started to review on Saturday every line of the draft submitted by the Energy Division, inserted a provision in the ‘perspective chapter’ that it would not be possible to export coal from Bangladesh keeping in view the country’s energy security for the next 50 years.

It also noted that the people and the nation were the owners of the country’s coal and other mineral resources. The committee also included in the draft a clause that the government sector would get preference in developing coal fields. ‘But, in case of emergency, the government will be able to take a decision on developing coal field through joint initiatives with private and public entities of local and foreign countries,’ its observed.

The meeting was told that no foreign company could be given any coal field alone and any foreign company could only develop coal field jointly with any state-run entities like Petrobangla or the proposed Coal Bangla. The modalities of such joint initiatives will be discussed by the committee in future.

The committee decided in principle to insert a provision in the policy for launching a pilot project on open-pit mining at Barapukuria coal mine covering eight square kilometre area to examine the viability of the mining method that drew much controversy in the country.

Two committee members, Professor Nurul Islam and Professor Badrul Imam, who submitted a paper on their recent experience on India’s coal sector, concluded that it would be unrealistic from environment considerations to go for open-pit mining in Phulbari coal field.

The professors from BUET and Dhaka University attended SAARC Technical Seminar on Strategies on Promotion of Coal Development and Clean Coal Technologies in SAARC Region on October 16 in Kolkata and visited an open-pit mine at Sonepur.

According to the paper of professors Nurul Islam and Badrul Imam, most of the open-pit mines in India are implemented at coal fields that have coal seams at a depth ranging between 100 and 200 metres, whereas in Phulbari, where Asia Energy has proposed to extract coal through open-pit mining, the coal seams are at a depth of 300 metres.

The meeting was told that the north part of Barapukuria coal field, where the country’s lone underground coal field is situated, has a coal reserve at a depth of 110 metres.

The meeting observed that by implementing a pilot open-pit mining at Barapukuria coal field, its impact on the environment could be assessed and experience on resettlement issue gathered.

It was suggested that a state-run entity would launch the pilot project for 10–12 years. But many of the committee members felt that funding would be the major obstacle to implementing such pilot projects.

University Grants Commission chairman Nazrul Islam, Bangladesh Army engineer-in-chief Major General Ismail Faruque Chowdhury, Professor Mustafizur Rahman of Dhaka University, Infrastructure Investment Facilitation Centre executive director Nazrul Islam, Petrobangla director Maqbul-E-Elahi, and former managing director of Barapukuria coal mining company Golam Mostafa attended the meeting, among others.

News and Update: Seminar dubs WB, IMF agents of corporate interests of developed countries

NewAge, October 20, 2007. Dhaka, Bangladesh

The programmes and projects of the World Bank and the International Monetary Fund are designed to benefit the corporate houses of the developed countries, speakers at a discussion in the city said on Friday.

The participants of the discussion on the anti-people policies of the two Bretton Woods institutions, organised by Voice, a non-governmental organisation, suggested more rigorous monitoring of activities of these lending agencies and hinted at the possibility of holding a people’s tribunal.

Piash Karim, a professor of economics at BRAC University, referred to a damning report of the Meltzer Commission on the World Bank which said that 70 per cent of the World Bank’s lending was made only in seven countries and that 80 per cent of its resources were spent on such countries that were able to repay their debts. ‘Even in the case of lending there is an obvious bias in this agency.’

He said it was not merely a matter of coincidence that individuals who previously in their careers had acted to further US policies worldwide, for instance Robert Macnamara and Paul Wolfowitz, were later chosen to head the bank. It is evident that the lending agency is used as a tool by the United States to serve its interests.

Piash suggested formation of a tribunal on the activities of these agencies and demanded accountability of their programmes.

Melissa Hussain, a professor of English at the North South University, dwelt upon how these agencies exert and retain their influence across the world through their money, knowledge, and power. She said these agencies furthered their neo-liberal propaganda by establishing themselves as knowledge bases on the one hand and exercising their power and monetary resources on the other and forced their clients to undertake policies that the agencies preferred.

She said an analysis would reveal how these agencies manipulated their data sets to establish their preferred economic policies as the best options. These only lead towards further privatisation and liberalisation without any regard for actual development or the rising inequity among the general people.

Anu Muhammad, a professor of economics at Jahangirnagar University, said their were indications in the latest annual publication of the World Bank, the World Development Report of 2008 focusing on agriculture, that the bank intended to completely commercialise this sector.

This, he suggested, would follow from the green revolution of the 60’s which eventually led to an increase in the use of chemical inputs and gradually destroyed the soil fertility and environment, all in the name of higher yield of food grains.

He said the World Bank’s crusade against corruption and advocacy for good governance were merely eyewashes as it did not believe in them but just chose to implement such programmes in places where they suited its interests.

‘Many a corrupt regime have been provided with generous assistance from these agencies, while many a regime genuinely committed towards eradicating corruption have been criticised by them.’

‘These agencies, through their exercise, ensure that the cost of living increases and that poor countries gradually become wholly dependent on their assistance and act as captive markets for corporations based in the developed countries,’ he said.

Anu also suggested forming a people’s tribunal, where people would give their testimonies regarding how they had been affected by the policy prescriptions of the lending agencies.

Ahmed Swapan Mahmud, executive director of Voice, presented the keynote paper and moderated the session.

World Bank Protesters Hit The Streets In Washington

By Mary Beth Sheridan, republished from CommonDreams.org, October 21, 2007

White-helmeted D.C. police briefly scuffled with protesters yesterday during a demonstration outside the World Bank, but no one was seriously injured or arrested, officials and protesters said.

The confrontation came after violence erupted Friday during a protest in Georgetown. Objects were thrown at store windows, newspaper boxes were overturned and a police officer was pushed from a scooter, authorities said. Yesterday was quieter.

About 500 demonstrators marched from Franklin Square, near the White House, to World Bank headquarters, at 18th and H streets NW. The protesters, a mix of students, community activists and black-clad anarchists, denounced the policies of the World Bank and International Monetary Fund, which are holding meetings this weekend.

The event was peaceful except for a tense moment in Edward R. Murrow Park, across from the bank, where the march ended. As delegates arrived for the meetings mid-afternoon, several anarchists charged the police line, according to officials and two demonstrators. Baton-wielding police raced in, shoving protesters and snatching their signs. A crowd massed, shouting “Our streets! Our streets!”

“They charged the police line,” said D.C. Assistant Police Chief Patrick Burke, head of the homeland security bureau. “Police lines cannot be broken.”

A protester who identified himself as Bob Exe, 20, said police struck him on the shoulder and nose with batons. The District resident, who had stuck a tissue into his bloodied nose, said no one charged the line but there “might have been some pushing.” He acknowledged that the demonstrators had been trying to block delegates from reaching the World Bank.

Yesterday’s event was a faint echo of the anti-globalization protests that brought huge crowds to the city in past years. In 2000, about 20,000 demonstrators converged on Washington, disrupting parts of downtown and clashing with police.

At protests two years later, D.C. police came under strong criticism for arresting hundreds of peaceful demonstrators without warning. The District has since paid hundreds of thousands of dollars in legal settlements and adopted new protocols to prevent abuse of police power.

Two protesters were arrested Friday night and charged with assaulting police officers.

Hundreds of D.C. police were on the streets for yesterday’s protests, including SWAT teams. Some protesters yelled insults at police, but others said they had decided not to use violence.

“We’ve got immigrants and others we don’t want to put in danger,” said Luke Kuhn, 42, a self-described anarchist from Montgomery County.

Other protesters warily eyed the anarchists, who wore bandannas over their faces and waved black flags.

“This is not the usual environment to see us in, surrounded by people in balaclavas,” said Ben Margolis, 27, a British demonstrator with the group Global Call to Action Against Poverty. “We’re here to demonstrate the passion of civil society. We call on the Bank and Fund to become more transparent and promote good governance and end the negative conditions they put on their loans.”

This weekend’s demonstrations were organized by the loose-knit October Coalition and drew people critical not only of the international institutions but also of gentrification, U.S. immigration policies, D.C. school vouchers and consumption of meat.

An organizer, Sameer Dossani, acknowledged that the crowd was small compared with past years. He attributed the turnout to the scheduling of a variety of antiwar and other demonstrations this month in the District and other cities.

“It’s good a lot of things are happening. But we do take away from one another a little bit,” he said.

Millions Stand Against Poverty in 24-Hour Global Rally

By Haider Rizvi, Republished from CommonDreams.org

UNITED NATIONS - Anti-poverty activists Wednesday organized thousands of meetings and demonstrations across the world to highlight the plight of the downtrodden and the poor.

Organizers said about 39 million people joined the international anti-poverty campaign during the 24-hour period, setting a new Guinness World Record for participation in mass rallies against poverty.

People participated in more than 6,000 rallies in 110 countries in support of the campaign called “Stand Up and Speak Out.” This year, the event coincided with the 20th International Day for the Eradication of Poverty.

From workers to peasants to students, those who joined the global campaign against poverty urged governments to fulfill their commitments on achieving the Millennium Development Goals (MDGs) by 2015.

The MDGs include a 50-percent reduction in poverty and hunger; universal primary education; reduction of child mortality by two thirds; cutbacks in maternal mortality by three quarters; the promotion of gender equality; and the reversal of the spread of HIV/AIDS, malaria, and other diseases.

“Every day 50,000 people die needlessly as a result of extreme poverty,” said UN Secretary-General Ban Ki-moon in a statement, noting that the gap between rich and poor is getting wider.

Like demonstrators across the world, Ban took world leaders to task for the slow progress towards achieving the MDGs. “(The) record is mixed,” he said. “Many countries are still off track.”

UN experts on development say, worldwide, almost 1 billion people are still living on less than a dollar a day and some 72 million children are not in school.

In Ban’s view, poverty can be eradicated only if governments of both developed and developing countries live up to their promises. He urged poor countries to spend more on health and education and, in the same breath, appealed to wealthy ones to increase the level of their official funding for development.

For his part, UN General Assembly President Srgjian Kerim noted that more than anywhere in the world, it was in sub-Saharan Africa where governments were failing to achieve the MDGs. Kerim said that, as this year marks the midpoint to the goals’ deadline, the world community must recommit its efforts to eradicate poverty.

The president said he would use the current General Assembly session to “build consensus” for urgent actions to achieve the MDGs.

Last year, 23.5 million people took part in the mass rallies to support the MDGs; 3.6 million in Africa; 19 million in Asia; 55,000 in Latin America; 520,000 in the Middle East; and 900,000 in Europe.

“By standing up last year, millions around the world demonstrated their frustration with the lack of real progress in poverty eradication,” said Salil Shetty of the United Nations Millennium Campaign before the event. “This year, millions more are joining this growing global movement of people who refuse to stay silent in the face of poverty or broken promises to end it.”

For this event, the Global Call to Action Against Poverty (GCAP) and the UN Millennium Campaign worked with large numbers of national and local partners — from schools and universities to local community groups and women’s groups, choirs, and sporting clubs to faith groups, trade unions, and corporations.

The events planned were meant to be entertaining and engaging, while making a strong impression on national and regional politicians and governments, as well as state and global institutions. Millions of people also joined the campaign in cyber space, posting blogs, wikis, videos, and pictures on various online communities such as Facebook, MySpace, and Bebo.

In Italy, Microsoft created a dedicated micro-site for the action, and in many poor countries — especially in Africa — mobile phone technology enabled groups to pre-register their activities online view videos of “Stand Ups” in other countries.

In Rwanda youth groups organized a “Stand Up” soccer tournament with 20 primary schools. A youth network in Ghana appointed “Stand Up” ambassadors to lead events all over the country.

In Bangladesh an umbrella movement of youth groups mobilized 10,000 young people to block a busy crossroads with a human chain, and in India, a local organization planned a march of 20,000 Dalits (also known as “untouchables”), focusing on land rights and the achievement of the MDGs for Dalits in the State of Madhya Pradesh.

Similar events also took place all over Europe and North and South America. In Germany the Euro 2008 Qualifier soccer game against the Czech Republic saw fans starting the match with a massive “Stand Up” moment. In The Hague the national anti-poverty campaign displayed 200 life-size avatars representing members of the public from across The Netherlands.

In London trade union representatives, students, and the UN Deputy Secretary-General used a white band — the symbol of the global anti-poverty campaign — to call for renewed commitments on more and better aid, debt cancellation, trade justice, gender equality and public accountability.

Religious leaders in many parts of the world also joined in.

During the campaign, many activists highlighted the link between gender inequalities and poverty because women constitute the majority of the world’s poor, largely as a result of their unequal opportunities and access to resources, discriminatory laws, and unequal distribution of household resources.

News and Update: Hundreds say World Bank needs an oil change

Read the statement: Global coalition calls for an end to ‘oil aid’

October 18, 2007, Washington, DC. - More than 200 organisations from 56 countries are calling on the World Bank and other international financial institutions to end subsidies to the oil industry. In a statement released today, the groups refer to ‘oil aid’ as one of the most glaring barriers to fighting climate change and addressing energy access in developing countries. [1]

As the heads of the World Bank gather in Washington this week to discuss their energy lending and climate change strategy, the latest annual report of the International Finance Corporation indicates that little has changed in the institution’s approach. In 2007, the private-sector lending arm of the World Bank provided more than $645 million to oil and gas companies. This is an increase of at least 40 per cent from 2006. [2]

“The World Bank’s approach to climate change and energy is inconsistent and contradictory,” said Jennifer Kalafut of NGO Oil Change International. “Despite commitments to cut global greenhouse gas emissions, it continues to increase support for oil extraction projects around the world.”

In 2006, the World Bank increased its energy sector commitments from $2.8 billion to $4.4 billion. Oil, gas and power sector commitments account for 77 per cent of the total energy sector programme while ‘new renewables’ [3] account for only 5 per cent. [4]

“The oil industry includes some of the most profitable companies in the world,” said Petr Hlobil of the CEE Bankwatch Network based in the Czech Republic. “Why is the World Bank using development assistance earmarked for poverty reduction to subsidise oil, when investment is desperately needed in renewable energy sources?”

“Investing in renewable electricity will save 10 times the fuel costs than if we stayed on a ‘business as usual’ course with fossil fuels,” said Daniel Mittler from Greenpeace International. “We can cut global CO2 emissions by 50 per cent by 2050, while addressing issues of energy access for the poor and maintaining global economic growth.”

The Bank’s support to the oil sector is also highly inequitable. While the majority of its oil projects are designed for export to wealthy countries, 1.6 billion people, including 500 million in sub-Saharan Africa, still lack access to electricity.

“By funding these oil projects the World Bank is undermining its own goals of fighting energy poverty and reducing greenhouse gas emissions. It is also perpetuating problems of conflict and human rights violations often associated with extractive projects, as in the case of the Chad-Cameroon pipeline,” said Korinna Horta from Environmental Defence, a U.S-based NGO.

The hundreds of groups and affected communities that have signed this statement are demanding that the World Bank and other public financial institutions stop financing oil projects. They assert that development assistance should be tackling the issue of energy poverty and building clean energy pathways rather than subsidising big oil.

[1] The Global Call to End Oil Aid is endorsed by more than 200 organisations from 56 countries. It is available in English, French, German, Spanish, Portuguese and Russian at www.endoilaid.org/globalcall.

[2] In FY06 the International Finance Corporation (IFC) provided $454.4 million in financing to fossil fuels. See statistics generated by Bank Information Center at: www.bicusa.org/ifc_spreadsheet. The IFC’s FY07 Annual Report is available at www.ifc.org.

[3] ‘New renewables’ is a term used to cover renewable energy such as wind, solar, and mini-hydro. It does not include large hydropower (>10 MW) nor energy efficiency.

[4] Energy to reduce poverty: the urgency for G8 action on climate justice, page 7, Practical Action, 2007.

Contacts: Jennifer Kalafut, +1 202 415 4047 (in Washington, D.C.)
Daniel Mittler, +49 171 876 5345 (in Washington, D.C.)
Petr Hlobil, + 420 60 315 4349 (in Prague, Czech Republic)
Korinna Horta, +1 202 431 9406 (in Washington, D.C.)

News and Update: UN rapporteur calls for biofuel moratorium

Download the statement of Special Rapporteur Jean Ziegler as PDF: therighttofood.pdf

The United Nations Special Rapporteur on the Right to Food is demanding an international five-year ban on producing biofuels to combat soaring food prices.

Switzerland’s Jean Ziegler said the conversion of arable land for plants used for green fuel had led to an explosion of agricultural prices which was punishing poor countries forced to import their food at a greater cost. “232kg of corn is needed to make 50 litres of bioethanol,” Ziegler said on Thursday. “A child could live on that amount of corn for a year.”

Using land for biofuels would result in “massacres”, he said, predicting a reduction in the amount of food aid sent to developing countries by richer ones.

“It’s a total disaster for those who are starving.”

Ziegler’s proposal for a five-year moratorium, which he plans to submit to the UN General Assembly on October 25, is aiming to ban the conversion of land for the production of biofuels.

Ziegler said he hoped that by the time the moratorium was lifted science would have made sufficient progress to be able to create “second generation” biofuels, made from agricultural waste or from non-agricultural plants such as jatropha, which grows naturally on arid ground.

Taking Brazil as an example, Ziegler said he deplored the fact that sugar cane plantations, whose products were used for biofuels, were spreading at the expense of food-producing land.

He said ten hectares (100,000 square metres) of food-producing land could sustain an average of seven to ten farmers, whereas the same area could only produce enough sugar cane for one farmer.

Jean Ziegler

Threat to poor

Only two years ago, with the twin spectres of peak oil prices and climate change looming, biofuels seemed the ideal alternative energy.

Now it is the poor who have to contend with the flip side of biofuels: spiralling cereal prices, say experts.

“The days of cheap food are over,” said Joachim von Braun, director of the International Food Policy Research Institute, in an article for the Swiss Agency for Development and Cooperation (SDC) in September.

Over the past decade, while production of biofuels using corn, sugarcane, soybean and other staples has risen dramatically, malnutrition has continued. Nearly 900 million people worldwide suffer hunger, 70 per cent of them food producers, peasants and rural dwellers.

Von Braun warns this figure could hit one billion in just a few years and that rising demand and increased bioenergy costs are affecting food prices.

“The bioenergy market receives considerable state funding and is dominated by the heavyweights in the oil, cereal and automobile industry,” he said.

“Barring technological progress and enactment of regulations based on transparent standards, we are looking at a 20-40 per cent increase in food prices between now and 2020. And the poorest, some of whom live on 50 cents a day, will be unable to foot the bill.”

Environmental impact

A study commissioned by the Swiss authorities in May also concluded that biofuels might not be the panacea for the world’s fossil-fuel woes.

Such fuels, touted as an ecologically friendly source of energy, might be more harmful for the environment than their fossil counterparts, it said.

According to the authors, while it was true that biofuels might emit less greenhouse gases than fossil fuels when consumed, producing them was generally more stressful on the environment.

Growing and processing crops for energy purposes or feedstock can have the heaviest environmental impact, as soil quality can be affected adversely, for example through fertiliser overuse.

ADB’s Future Strategy: Would It Really Matter to the Poor?

Hemantha Withanage and Ronald Masayda, NGO Forum on ADB, September 2007

Download a fully refferenced PDF version: adbs-long-term-strategy-framework-would-it-really-matter-to-the-poor.pdf

Introduction

The initial implementation review of and the multi-stakeholder consultations on the Asian Development Bank’s Long Term Strategy Framework (LTSF) bear close scrutiny and watching for instructive insights on the accomplishments or failings of the Bank’s anti-poverty agenda in the first five years. It is also important to carefully monitor and observe how the results of this review exercise would affect the Bank’s poverty reduction directions, priorities and activities in the next 10 years.

The ADB says the basic premise for the LTSF review are attributable to the changing regional and global trends to wit: unprecedented high rates of growth, global capital flows into the region, the co-existence of high rates of savings along with the need for high investment rates, and significant adverse environmental implications associated with the high growth rates. The undertaking, therefore, should give pause to the Bank to assess whether its over-all prognosis of a poverty-free region by 2015 is indeed reachable and realistic.

This brings to fore the Report presented by a panel of Eminent Persons Group (EPG) during the recent Kyoto Annual Governors Meeting, which was met with vigorous criticisms from ADB Governors, civil society organizations, and other stakeholders for its overly-optimistic anti-poverty findings and forecasts. Released in April 2007, the EPG Report provides the basic inputs to the review.

Foremost among the Report’s recommendations is for the ADB to include as an overarching goal “inclusive growth” to expand opportunities for the poor in Developing Member Countries. The EPG Report has suggested that “ADB must change radically and adopt a new paradigm for development banking. The new ADB should help tackle issues critical to the further development of a new “middle-income” Asia, by offering a more balanced blend of knowledge and financial assistance. To address the remaining pockets of poverty, its primary emphasis would be on supporting higher and more inclusive growth rather than transferring external aid resources. Functioning as a financial intermediary, the Bank would connect together lenders and borrowers from within the region.”

How this strategy would actually matter to the poor citizens of Developing Members Countries (DMC) is the very question that needs to be concretely addressed by the Bank.

ADB’s Long Term Strategy Framework (2001-2015)

Poverty reduction became the ADB’s overarching goal in early 1999. The Board of Directors subsequently approved the poverty reduction strategy later that year. In 2000, the private sector development was approved to primarily support this effort through the promotion of growth. The LTSF, entitled “Moving the Poverty Reduction Agenda Forward in Asia and the Pacific” builds on these two strategies, takes into consideration ADB’s other policies, such as that on governance, and is integrated with the International Development Goals, the series of aims and benchmarks agreed to by world conferences for tackling poverty worldwide by 2015.

Reducing poverty, in all its forms, is the greatest challenge for the international community according to ADB. “Of the world’s 6.0 billion people, 1.2 billion live on less than $1 a day and another 2.8 billion live on less than $2 a day. Eight of every 100 infants do not live to see their fifth birthday; nine of every 100 boys and 14 of every 100 girls reach school age without enrolling in school. Poverty is also most visible among people who have no political representation or voice; those who have limited or no access to basic social services; and those who are vulnerable to ill health, economic dislocation, social injustice, and natural disasters.”

“Following the agreements and resolutions of various world conferences organized by the United Nations in the first half of the 1990s, seven broad international development goals (IDGs) have been identified. Each IDG addresses one aspect of poverty, but they should all be seen as a whole in tackling the world’s poverty problems by 2015. The IDGs, which serve as benchmarks to the global effort to address the core causes of poverty are as follows:

• Reduction in the incidence of extreme poverty by half between 1990 and 2015;
• 100 percent primary school enrollment by 2015;
• Elimination of gender disparities in primary and secondary education by 2005;
• Reduction in infant and child mortality by two thirds between 1990 and 2015;
• Reduction in maternal mortality ratios by three quarters between 1990 and 2015;
• Access for all to reproductive health services by 2015;
• Implementation by all countries of a national sustainable development strategy by 2005; and
• Reversal of the loss of environmental resources by 2015.”

“The Asia and Pacific region has made a lot of progress in achieving the IDGs. The progress has, however, been uneven. South Asia lags behind with respect to several key indicators, as shown in the accompanying table, and considerable concerted efforts will be required if the IDGs are to be achieved. For East Asia in aggregate, many of the goals—including reduction in the incidence of poverty—had almost been achieved by 1998. However, much still needs to be done to reach the targets for reductions in child mortality and increased access to reproductive health care. Also, environmental deterioration and degradation remain a major concern across the region.”

LTSF has identified (i) sustainable growth; (ii) inclusive social development; and (iii) good governance for effective policies and institutions as the three core strategic thrusts for the Bank’s interventions. The crosscutting themes are the role of the private sector; and regional cooperation and integration for development, and environmental sustainability.

The Bank has also two mid-term strategic frameworks, MTS I and MTS II, covering the periods 2001-05 and 2006-08, respectively. MTS II emphasizes six strategic priorities: (i) improving the investment climate; (ii) catalyzing private sector investment; (iii) ensuring the inclusiveness of growth, particularly through gainful employment; (iv) managing the environment; (v) promoting regional cooperation and integration; and (vi) assisting weak performing countries. Meantime, the sectoral priorities for core operational areas and expertise are education, transport and other connectivity infrastructure, energy, water, urban and rural infrastructure, and financial sector reform.

In June 2004, ADB Management adopted an internal Reform Agenda for Development Effectiveness. This reform was developed partly in response to the Asian Development Fund (ADF) IX negotiations. Under ADF IX, donors significantly increased their contributions based on the Bank’s commitment to improve its institutional performance and results-focus through a series of reform measures, which are largely included in the Reform Agenda. The Banks is obligated to report the progress of the Reform in the ADF IX Mid-Term Review, in 2006. The reform covers five areas:

• Mainstreaming management for development results;
• Reinforcing knowledge management;
• Improving operational policies and strategies;
• Refining organizational processes and structure; and
• Improving human resource management and staff incentives.

Under the auspices of the reform, a new organizational structure was put in place in 2002 with the intention to better equip the Bank to meet its LTSF. Major structural changes consisted of the integration of programs and projects functions in regional departments (RDs), the mainstreaming of operational support for thematic issues in RDs, and the creation of the Regional Sustainable Development Department (RSDD). An independent assessment of the 2002 reorganization was conducted in 2004 to provide an analysis of the extent to which objectives have been met.

Eminent Persons Group Report

In 2006, the ADB commissioned a panel of eminent persons chaired by Dr. Supachai Panitchpakdi, United Nations Conference on Trade and Development (UNCTAD) head, to produce a report that will forecast ADB’s future role in the Asia and the Pacific region. The EPG Report was based on five background papers namely: (i) The Challenge of Employment Creation in Developing Asia; (ii) Financial Systems in Asia; (iii) Public-Private Partnerships: The Next Generation of Infrastructure Finance; (iv) Accelerating Rural Transformation in Asia; and (v) Prospects for Enhancing Regional Economic Cooperation and Integration in Asia.

By 2020, the EPG envisages the Asia and the Pacific region as:

• Accounting for more than 25 percent of global GDP in nominal dollar terms and as much as 45 percent of global GDP in PPP terms
• Closer to Latin America in GDP per capita, in stark contrast to 1980 when Asia’s per capita income was less than a fourth of Latin America’s.
• Having an overwhelming majority of people living in middle-income countries, with perhaps only about 10 percent of Asians still in absolute poverty ($1 a day).
• More urbanized, with the majority of people living in mega or medium size cities, raising new social and environmental issues.
• A “capital-surplus” region, with some countries having surplus savings while others require external (including regional) capital to achieve higher investment rates to fuel economic growth. Asia can be expected to continue to have large accumulated reserves.
• Increasing its intraregional trade and investment, even as integration advances with the global markets for goods, services, and capital. By 2020 the Asia and Pacific region could account for about one-third of world trade, compared with the U.S. share of about one-seventh.
• An even larger user of natural resources including energy, other minerals, and forest products. Human activities and economic policies in Asia will become more important for the global commons, including the environment.

Key barriers identified are: rising disparities, unfinished poverty agenda, environmental degradation, infrastructure bottlenecks, underdeveloped financial sector, regional and global integration, innovation and technological development, and transformation of institutions.

The Report cites that the most critical among the challenges and risks facing the region seem to be: (i) poverty and low levels of income and human development; (ii) the adverse impact of rapid economic progress on environment and natural resources; and (iii) the need for continued efficiency and regional integration into the global economy. Therefore, these approaches will be promoted through inclusive growth, environmentally sustainable growth, and regional cooperation and integration.

The Bank conducted sub-regional, multi-stakeholder consultations recently to obtain diverse and wide-ranging views on this new vision and operational focuses for the ADB.

Rapid Economic Growth and Poverty-Free Asia

In the global context, the trends in the international development community show a more pronounced move towards common goals under the flagship of poverty reduction during the last decade. These increasingly integrated the dichotomy between the “macro economic and growth” and “distribution, equity, and social & environmental consideration” oriented approach to development. The adoption of Poverty Reduction Strategy (PRS) and Millennium Development Goals (MDGs) across all major international, regional and bilateral development agencies, and recipient countries, coupled with a sharper country focus and more effective and harmonized assistance centered on each country’s national poverty reduction strategy as expressed in the Paris Declaration on Aid Effectiveness. These movements gradually directed the aid coordination away from “division of labor” based approach to more integrated approach across all donors, manifested in the adoption of common operational framework, joint programming and project financing, and harmonization.

On the other hand, the EPG Report is quite confident and bullish about its projection of a fast growing Asia-Pacific region where most DMCs would eventually graduate to a middle income level. “By 2020 we envision a dramatically transformed Asia. It will have conquered widespread absolute poverty in most countries, with more than 90 percent of its people living in “middle-income” countries. Tempering this overall positive picture is that some of the fastest growing countries will still have large numbers of poor people. Asia will continue to have many low-income or fragile economies with large development challenges.” Current economic indicators in most DMCs, however, show that the economic cleavage between the rich and the poor in the region continues to widen. The rampant poverty situation in the region was also underscored by members of the Board of Governors during the Kyoto AGM. They called on the ADB to continue with its original mission of poverty alleviation as well as its primary focus of narrowing disparities between the rich and the poor until the overarching mission is fully accomplished. Some delegates even questioned the Bank’s optimism on more than fulfilling the targets set in the Millennium Development Goal, arguing that the region remains home to about two thirds of the world’s poor. Their concerns were even echoed by Governors from developed member economies, who contended that a number of countries still have high levels of poverty and inequality.

Meanwhile, EPG’s finding seems to be quite contrary to the findings contained in the Millennium Development Goals: Progress in Asia and the Pacific Report in 2006. According to the MDG Report, the region is making slower progress in terms of addressing grave problems related to basic health and sanitation, infant mortality, HIV incidence, and access to safe water. The Report actually cites that “in many social indicators, including some of the MDGs, the Asia and Pacific region (mainly South Asia) lags behind its very impressive progress in meeting the income-poverty targets”. Unfortunately, we were unable to find any reliable projections of the region’s likely performance, specifically of low-income countries, in meeting MDG targets by 2020.”

Rapid economic growth has been the buzzword for most International Financial Institutions (IFIs) over the past two decades. This was seen as the only solution for the increasing poverty incidence and magnitude in DMCs. While a handful of countries have become middle income countries, the rest of the low income countries were caught in a debt trap. Unsustainable economic growth, which was flimsy based on the assumption that there are adequate natural and manpower resources that can be converted into wealth, increased socio-economic inequalities in DMCs. Seeing that large-scale infrastructure was viewed as the major catalyst for growth and development, most IFIs lent their money to fund such infrastructure projects. However, resources depletion, environmental degradation on top of natural calamities and the climate change problem were not factored in the equation.

In most DMCs, poverty is due to the inequitable distribution of wealth that was the unwitting by-product of rapid growth. IFIs facilitated the entry of multinational companies and big corporations, through their so-called development paradigms espousing liberalization, deregulation and privatization. Resources in rural areas were taken away by big businesses without providing just and adequate compensation to affected communities. Moreover, these multinational companies have been known to exploit local workers (i.e. cheap labor, underemployment, poor working conditions). The poor were pushed into landlessness and were stripped of their traditional access to their natural environmental and resources.

The ‘$1 per day’ and ‘$2 per day’ pegs are two frequently used economic yardsticks to determine or even define poverty. On the basis of the World Bank’s data, 45 percent of the world’s population or around 2.8 billion people live below the ‘$2 per day’ poverty line; and more than 1.1 billion – more than the total population of the developed world – below half of this income level.

Inclusive growth

Multilateral banks like the ADB have long peddled the fallacy that rapid economic growth is the very means by which to reduce poverty in the region. The EPG Report’s 2020 projection of most DMCs graduating to middle-income status supports the Bank’s assertion. It suggests three major approaches for the ADB to wit: (i) promote inclusive growth; (ii) facilitating environmentally sustainable growth; and (iii) promoting regional (and global) integration. Ironically, at least 700 million people in Asia will be still below the ‘$1-a day’ poverty line by 2020.

The Policy Brief Series No. 48 prepared by the Economic and Research Department defines the Bank’s view of “inclusive growth”. It states that while the poverty incidence is falling, there is a growing inequality in most countries. “The multidimensionality of equity requires the reduction in inequality in the access to opportunities, access to public goods and services and access to social safety nets (World Bank 2006a). Equity encompasses pro-poor growth with its one-dimensional focus on income inequality. On the other hand, pro-poor growth encompasses poverty reduction, which focuses solely on the impact of growth on poverty reduction regardless of income inequality”.

“Expansion of opportunities can occur only through sustainable growth that is efficient and environmentally sustainable. In order to avoid the danger of equating equity with redistributive policies that in the past have neither generated growth nor equity, equity as defined in this section is termed inclusive growth”. This means equity provides greater access to opportunities, especially for the poor and the less well-off. However, this could only be attained through sustainable growth and the correction of market, political and institutional failures. The Briefer has termed equity as inclusive growth to differentiate it from the previous redistributive policies of the ADB that has failed to generate economic growth and promote equity.

A report published by the New Economic Foundation (NEF) states that “new analysis indicates that global economic growth is an extremely inefficient way of achieving poverty reduction – particularly MDG1 – and is becoming even less effective. Between 1990 and 2001, for every $100 worth of growth in the world’s income per person, just $0.60 found its target and contributed to reducing poverty below the $1-a-day line. To achieve every single $1 of poverty reduction therefore requires $166 of additional global production and consumption, with all its associated environmental impacts. This approach is both economically and ecologically inefficient. It will be highly improbable to reconcile the objectives of poverty reduction and environmental sustainability if global growth remains the principal economic strategy. The scale of growth this model demands would generate unsupportable environmental costs; and the costs would fall disproportionately, and counter-productively, on the poorest – the very people the growth is meant to benefit.”

True to form, when IFIs found out that the poor are still mired in poverty despite the rising Gross Domestic Product (GDP) in DMCs, they responded by shifting the language to ‘pro-poor growth’ to address the distributional problems. However, poverty incidence level has worsened due the same approach/strategy that was implemented and adopted by these IFIs. The kind of pro-poor growth approach that is supposed to promote the reduction of inequality as well as the increase of income level has never materialized.

The Risks and Challenges in the Region

Clearly, the widening rich-poor disparity compounded by environmental degradation and disasters pose the main risks to developing economies in Asia and the Pacific. Both problems can be likened to time bombs that could explode anytime unless sound macro-economic policies that genuinely support sustainable and pro-poor growth are put in place by IFIs like the ADB.

The EPG Report cites other discrepancies: “Rising disparities are not unusual during periods of rapid growth and major structural changes, and most people are benefiting from growth. But unless the rising disparities between and within countries are addressed urgently, they could ultimately threaten the political stability and social cohesion of the fast-growing countries. This in turn could result in a political backlash, bringing to power political leaders opposed to economic liberalization. Were this to happen, economic growth rates and flows of private capital to the Asia and Pacific region would suffer major setbacks”.

Indeed, the inequitable wealth distribution and income disparity are major issues bedeviling low income and even middle income countries. It goes to show how unsuitable the market principles and fundamentals that all these economies are following at present. While the ADB should not push for the opening up of market economies across the region, it should also develop alternative development models that would be congruent to the socio-economic needs and priorities of DMCs.

On the other hand, the deterioration of the environment due to rapid industrialization is evident in fast-growing economies such as China and India. Citizens of these two countries along with those of neighboring countries are exposed to environmental risks and hazards. Other densely populated countries like Pakistan, Bangladesh, the Philippines, and Indonesia have to resolve the growing problems on exploitation of resources, pollution of waterways, landlessness, air pollution, desertification, and diminishing forest cover among others. Furthermore, poor communities are now seen most likely to be most vulnerable to climate and natural disasters.

Privatization efforts for both public utilities and management of natural resources are likewise serious risks that face the poor all over Asia and the Pacific today. Under the guise of private sector participation or public-private partnership, privatization has denied the poor rightful access to public services and natural resources.

The issue of growing debt for many small economies is another huge burden to the poor since the latter suffer the brunt of the debt repayment. With debt appropriation high on most DMC’s economic agenda, the national budget for basic social services usually gets cut. Unless the ADB devise a mechanism that would release these countries from the debt trap, the poor will never benefit from any Bank-aided social development project. Conducting a comprehensive debt audit or a restructuring of loan terms that would be favorable to low income and middle income countries would pave way for the prioritization of delivery of basic goods and services to their respective citizenries over debt repayment.

Role of the ADB and Balancing Acts

As a multilaterally-tasked and governed institution, the Bank has to refocus its banking role since it is one of the root causes of the socio-economic disparities and resources depletion problems that are occurring in most DMCs. A delicate balancing act between “banking” and “development,” calls for a major change in attitude and mindset in the ADB. Perhaps the Bank can start by adopting a more emphatic term like “improving the quality of life of the poor” instead of using the hackneyed term “poverty alleviation.”

But more than semantics, the Bank should realize that ensuring “sustainable livelihood for the poor” is the best way to attack the poverty problem. In particular, rural development should be planned according to existing local situations/conditions and with the meaningful participation/involvement of communities. Based from documented case studies and previous experiences, the ADB has been found as not serious enough in ensuring the meaningful participation of stakeholders, especially the poor, marginalized, and vulnerable groups, both in the formulation of national development strategies and in the implementation of its programs and projects. It is warranted, therefore, for the Bank to improve its current consultation processes by crafting a guiding policy or stringent implementing guidelines that would ensure the participation of affected communities, civil society organizations and other relevant stakeholders to an honest, no-nonsense, no-holds-barred, robust, and structured project-based or policy-related consultations.

Going back to the findings of the 2006 MDG Report, most Asia and the Pacific countries are behind meeting the MDGs. Therefore, the Bank needs to realign its soft loans in consonance with the MDGs. Furthermore, it also needs to align its soft funds vis-à-vis global commitments that were made in international summits/conferences like the Kyoto Protocol, the Education for All 2015 and the 2002 World Summit for Sustainable Development Johannesburg Plan of Implementation.

Moreover, the Bank should end conditionalities, particularly in the areas of political and macroeconomic policies; and put a stop to the practice of tying development aid to the hiring of foreign consultants, purchase of goods, and the like. Further, the soft loans should be progressively increased to support the improvement of social services delivery and pro-poor infrastructure development programs for health, agriculture, education sectors among others. The poorest regions of DMCs should be given priority when it comes to aid.

The infrastructure programs of the Bank are driven not for the very purpose of poverty alleviation but for industrialization. Thus, the ADB should assist governments to adopt a rights-based approach to providing aid. This can be done by respecting social development principles to guide Bank operations in all sectors; at the same time upholding the human rights of the poor, especially those whose voices are at risk of being silenced or marginalized vis-à-vis aid: women, children, youth, Indigenous Peoples, ethnic minorities, and even non-citizens like migrant workers.

In matters concerning the health sector, the Bank should honor affordable health care and services as an uncompromised right of every citizen of developing nations. The ADB should not promote any policy that would lead to the privatization of the health care systems in DMCs, but instead support projects that would genuinely enhance health services for the poor.

Concerning free education, it is the only way out for the rural poor of the poverty quagmire. Again, the Bank should not advocate privatization of this sector. It should support provisions for modern educational facilities in formal and informal education sectors in both urban and rural areas.

In terms of core labor standards, the ADB has not sufficiently addressed this issue. The continuous enhancement and upgrading of skills as well as the protection of and respect for the rights of workers in ADB-funded operations in DMCs should be paramount in the Bank’s priorities.

Regarding the problem of corruption, the ADB should not just stop at denouncing all its forms and types, but should consistently see to it that the guilty or erring parties are given out stiff penalties and punitive actions. This would demonstrate the earnestness on the Bank’s part to weed out corrupt practices in all its activities and operations.

For gender justice and empowerment concerns, the ADB needs to assist countries to formulate an alternative framework that would give utmost protection to the rights of women in all aspects of development, as well as identify a set of indicators that would comprehensively measure the impacts of its operations on the welfare and well-being of women.

ADB Services and Competencies

The EPG Report has high hopes that the ADB would reinvent itself as a knowledge bank in the next decade. Whether the Bank would be able to develop the necessary expertise, competencies and skills set in time to achieve this vision is not the more urgent issue. Before the ADB fully entertains the lofty thought, it must assess first whether some of its staffmembers actually possess the right abilities, proper values, and depth of experience to handle highly sensitive and contentious undertakings. For example, the on-going Energy Policy/Strategy review has drawn flak from the civil society for the flawed review and consultation process. The Draft Paper, which was the basis of the sub-regional consultations, itself, has received major criticisms from different stakeholders for being poorly written and lacking in substance. On the other hand, the Safeguards Policy Update Team that is tasked to prepare the preliminary omnibus Safeguards Policy Statement, has been by rocked by the recent resignations of core members who protested the alterations done by the Management to their work. This matter has also revealed the issue of lack of due process and transparency in the on-going Safeguards review.

As regards the rosy prognosis for the ADB by 2020, the jury is still out whether the Bank would be able to complete its mission of eradicating poverty in Asia and the Pacific. But if current trends and indicators in DMCs are to be factored in, it would be safe to assume that the institution would not be done with its mission yet. Therefore, it would not be prudent and realistic for the Bank to change the present overarching goal in the next few decades.

Over the past 40 years, the ADB has gained acceptance as a broker among financial agencies operating in the region. Most of the prescribed financial mechanisms and approaches of these agencies do not carry enough or are devoid of any social and environmental safeguards. As a publicly-funded entity, the Bank should set the benchmark among financial institutions in the effective implementation of policies that protect the environment, affected peoples and Indigenous Peoples.

Conclusion

Absolute freedom from the oppressive shackles of poverty is a dream of every poor person. It’s a paramount right of every individual that should be recognized and ensured by governments of developing economies and most especially by the Asian Development Bank. As a multilateral bank that depends on public funds, the Bank should not gamble away the future of the poor citizens of Asia and the Pacific region to profit-oriented financial entities with little regard for the preservation of the environment, conservation of natural resources, and the protection of the rights of affected communities, minorities, and vulnerable groups.

Rather than promoting economic growth, the ADB should adopt “sustainable livelihood” as a main principle to its poverty reduction efforts in the region. It is imperative that it focus more on locally-acceptable but successful development models in DMCs. It should stop imposing on DMCs to open up their economies in order to produce goods and services for the benefit of both the national elites and developed nations.

Tasking ADB with non regional services is not a wise option. Instead of abandoning its role as a development bank, ADB should continue to strive in providing services assistance to the poor to alleviate them from poverty. As studies have shown, poverty incidence has not changed; hence, assuming that poverty will be resolved by 2020 is not only realistic but dangerous as well. Such presumptions would only lead to further neglect of the poor, who, in the first place, should be the beneficiaries of development aid. More so, the Bank should continue to promote the rights and welfare of the poor and marginalized groups against globalization. Without appropriate mechanism and sound policies in place, economic growth could become a catalyst to further impede the rights of the poor, which in the long run would only worsen the growing income disparity.

As such, the Bank should include the poor and the marginalized in its economic development models in order to fully realize its socialized poverty-free Asia. However, defending and promoting the environmental and social rights of the poor remain a big challenge to the ADB.

The ADB should not abandon its overarching goal, which is poverty reduction. Instead of transforming itself into a knowledge-based institution which runs counter to its development mandate, the ADB should continue to provide assistance to DMCs to bridge the continuously rising income disparity between the rich and the poor in the Asia and the Pacific region.

The NGO FORUM ON ADB is an Asian-led network of Civil Society Organizations that support each other to amplify their positions on the ADB’s policies and projects affecting the environment, natural resources, and local communities. The Forum neither accepts money from the ADB not is it in any way part of it.